In these globalised times, a US economic recession or a slowdown in the domestic economy could hit your business. A survival guide for the tough times.
CUT COSTS
Have a look at your business and figure out where you could save. If three employees are doing the job of one, you may need to make job cuts. Additionally, if you have two product lines and one is successful while the other one isn’t, consider selling off that division. When times are tough, it’s best to focus on core markets and spend money in those areas, not in areas that haven’t been more profitable.
RATCHET DOWN INVENTORY
The last thing you’ll want to do is get stuck with shelves of needless inventory. For a better idea of what you’ll need as the year progresses, keep an eye on leading consumer indicators. Also, establish inventory targets and ensure the sales and purchasing personnel are talking.
MAINTAIN PRICES
You may be tempted to slash prices to attract buyers from a recession-hit country. That could be a mistake. Sure, you’ll sell products but you’ll also cut your profit margins and likely to dilute your brand in the process. Plus, if customers decide to buy again from you in the future they may expect similar discounts.
RESERVE DISCOUNTS
Since you don’t want to dilute your brand’s value and you especially don’t want to start competing on price, tread lightly when it comes to offering discounts. Be sure to reserve them only for current, repeat customers.
FOCUS ON SERVICE
While expanding may open up avenues for growth, many small-business owners should focus on their existing customers and clients for a boost in revenue. Focusing on service is one of the best ways to add value without costing money.
INVEST IN EMPLOYEES
When the going gets tough, the employees you have will be your productivity all-stars. Make boosting productivity — within reason, of course, — a focal point. For those that rise to the top, be sure to reward them accordingly. You don’t want to lose your most productive people at this time.
FREE UP CASH FLOW
Be sure to free up your business’s cash flow by asking suppliers to extend payments dates. Also, if you have old debts, call them in. Having a good amount of cash on hand, especially in light of the credit crunch, will help you do everything from making payments to employees and vendors to spending on marketing campaigns, which may grow future business.
RENEGOTIATE CONTRACTS
If a contract, a lease or other obligation will soon be up for renewal, try to negotiate lower prices. At this point, you may be able to also make cuts. Take up a reality check of your expenses.
LOOK TO EXPAND
If you’re doing well for yourself, look for weaknesses and instability in your competitors. If they’ve been having trouble, you may be in a good position to pick up their businesses at bargain-basement prices. Their losses may be your gain.
Reference:
(Adapted from AOL’s small business website)
CUT COSTS
Have a look at your business and figure out where you could save. If three employees are doing the job of one, you may need to make job cuts. Additionally, if you have two product lines and one is successful while the other one isn’t, consider selling off that division. When times are tough, it’s best to focus on core markets and spend money in those areas, not in areas that haven’t been more profitable.
RATCHET DOWN INVENTORY
The last thing you’ll want to do is get stuck with shelves of needless inventory. For a better idea of what you’ll need as the year progresses, keep an eye on leading consumer indicators. Also, establish inventory targets and ensure the sales and purchasing personnel are talking.
MAINTAIN PRICES
You may be tempted to slash prices to attract buyers from a recession-hit country. That could be a mistake. Sure, you’ll sell products but you’ll also cut your profit margins and likely to dilute your brand in the process. Plus, if customers decide to buy again from you in the future they may expect similar discounts.
RESERVE DISCOUNTS
Since you don’t want to dilute your brand’s value and you especially don’t want to start competing on price, tread lightly when it comes to offering discounts. Be sure to reserve them only for current, repeat customers.
FOCUS ON SERVICE
While expanding may open up avenues for growth, many small-business owners should focus on their existing customers and clients for a boost in revenue. Focusing on service is one of the best ways to add value without costing money.
INVEST IN EMPLOYEES
When the going gets tough, the employees you have will be your productivity all-stars. Make boosting productivity — within reason, of course, — a focal point. For those that rise to the top, be sure to reward them accordingly. You don’t want to lose your most productive people at this time.
FREE UP CASH FLOW
Be sure to free up your business’s cash flow by asking suppliers to extend payments dates. Also, if you have old debts, call them in. Having a good amount of cash on hand, especially in light of the credit crunch, will help you do everything from making payments to employees and vendors to spending on marketing campaigns, which may grow future business.
RENEGOTIATE CONTRACTS
If a contract, a lease or other obligation will soon be up for renewal, try to negotiate lower prices. At this point, you may be able to also make cuts. Take up a reality check of your expenses.
LOOK TO EXPAND
If you’re doing well for yourself, look for weaknesses and instability in your competitors. If they’ve been having trouble, you may be in a good position to pick up their businesses at bargain-basement prices. Their losses may be your gain.
Reference:
(Adapted from AOL’s small business website)
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